The Best (and Worst) Commodity Investments of H1 2012

With the first half of the year officially in the books, investors have plenty of data and developments in the commodity world to talk about. With natural gas jolting back and forth and speculators calling tops and bottoms in crude oil and gold, it has certainly been a busy six months for commodity traders. One of the biggest sticking points for commodities was the speculation of QE3, which was eventually announced in the form of “Operation Twist”, which will likely shape prices for the latter half of the year. But when it comes to some of the best and worst performers from that time period, some of the results may surprise you. Below, we outline the three best and three worst commodity performances from the first half of 2012 [see also Jim Rogers Says: Buy Commodities Now, Or You’ll Hate Yourself Later].

The Worst

Many would expect to see big names like crude oil or natural gas falling under this category, as their rapid declines were well documented by the media and the blogging world alike. But the soft commodities, often known for their hefty volatility, were among the worst, ousting any losses from the two most popular fossil fuels in the world [see also 25 Ways To Invest In Natural Gas].

  1. Orange Juice: Certainly a surprising result, especially given the fact that these futures were among the best performing commodities for the last few weeks of 2011. But this juicy commodity started on a slippery slope that saw two key accelerations in March and May, propelling it to losses of approximately 28%.
  2. Cotton: The fluffy commodity is no stranger to big movements, but its steep decline (which also came in May) dug a pretty nasty hole for the remainder of the year. Cotton started off the year with a fair amount of momentum but was unable to overcome the hit that the collective “softs” group took just a few weeks ago. Cotton lost about 23.6% in H1 of this year [see also Inside Cotton’s Epic Crash].
  3. Coffee: This soft never had the “aha” moment of losses like the two aforementioned futures, but instead slowly trended downwards as the year progressed. The good news is that coffee was able to turn things around in mid June and has maintained its upward trajectory ever since. Despite recent gains, coffee still lost 22.5% over the last six months [for more commodity news subscribe to our free newsletter].

The Best

Those expecting to see big name commodities in the following list will be gravely disappointed. In fact, the best performers thus far in the year have been relatively unpopular futures contracts. It simply goes to show you that a broad understanding of the commodity world can often play to your benefit as the most popular contracts are rarely the top performers [see also The Ten Commandments of Commodity Investing].

  1. Soybean Meal / Soybeans: Soybeans have a fair amount of popularity as trading instruments, but soybean meal contracts are largely overlooked. Save a tough May, soybean meal futures did nothing but gain for the first half of 2012, chalking up gains of nearly 40%. Likewise soybean futures fared quite well, jumping 25.9%.
  2. Canola: These futures fall under the grains subsector of the agriculture umbrella. While they are certainly not the best known contracts on the market, they do receive a fair amount of volume from what is likely a niche market. Either way, there is no denying canola’s steady charge upward, as it tacked on approximately 21.4% this year.
  3. Oats: Another not-so-popular option, oats had an exceptional H1 as well. Oat futures, which are by far the least popular on this list, took a massive hit towards the end of May, surrendering all of their previous gains. But just as June was coming to a close, the futures made an even more impressive leap to finish out the first half of the year with gains of 15.5%.

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Disclosure: No positions at time of writing.

About Daniela Pylypczak

Daniela Pylypczak-Wasylyszyn is a regular contributor to, where she primarily focuses on commodity producers equities. She is also an analyst for, where she contributes articles and analysis each week. Since joining the team in 2011, Daniela has quickly grown to be one of the most widely-followed authors in the industry. Her articles are syndicated in a number of online publications, including Financial Advisor Magazine,, and Yahoo! Finance. Daniela is also a contributor for and Daniela graduated from DePaul University with a bachelor’s degree in finance and economics.
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Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

2 Responses to “The Best (and Worst) Commodity Investments of H1 2012”

  1. [...] in inflation over time; once that decrease crosses below the 0% threshold, it becomes deflation. Declining prices means that the money you hold in your hand gets more and more valuable by the day, making cash [...]

  2. [...] A second similar ETN from iPath is the Pure Beta Coffee ETN (CAFE). The only difference here is that there is no pre-set rollover schedule for the futures contracts. The fund manager may roll over into one of a number of futures contracts with varying expiration dates, as selected using a methodology designed by Barclays [see also The Best (and Worst) Commodity Investments of H1 2012]. [...]

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